Prescription Insurance Coverage: 10 Essential Questions to Ask Your Plan

Don’t Assume Your Prescription Is Covered

Just because you have health insurance doesn’t mean your meds are covered. In 2023, nearly 3 out of 10 people enrolled in a Marketplace plan discovered too late that their daily medication wasn’t on the formulary. One man in Ohio paid $3,200 out of pocket for his diabetes drug because he never checked. He thought his Silver plan meant everything was covered. It didn’t. Prescription drug coverage isn’t one-size-fits-all. Even plans with the same metal tier - Bronze, Silver, Gold - can have wildly different rules. The difference between paying $10 or $500 for a pill isn’t luck. It’s knowing what to ask.

Is My Exact Medication on the Formulary?

The formulary is the list of drugs your plan pays for. It’s not optional reading. It’s the core of your coverage. Every plan has one, and they change every year. A drug covered last year might be moved to a higher tier or dropped entirely. You can’t guess. You have to look. Type your exact medication name - brand and generic - into your insurer’s online formulary tool. If you’re on Medicare, use the Medicare Plan Finder. Enter the National Drug Code (NDC), not just the name. That’s the only way to be 100% sure. If your drug isn’t listed, assume it’s not covered. No exceptions.

What Tier Is My Drug On?

Formularies are split into tiers. Each tier has a different price. Tier 1 is usually generics - think $10 copay. Tier 2 is preferred brand-name drugs - around $40. Tier 3 is non-preferred brands - often $100 or more. Tier 4 is specialty drugs - like biologics for rheumatoid arthritis or cancer - and those can cost $1,000+ per prescription. If your insulin is on Tier 3, you’re paying $100 a month. If it’s on Tier 2, you’re paying $40. That’s $720 a year difference. Don’t just ask if your drug is covered. Ask what tier it’s on. That tells you the real cost.

Do I Have to Try Other Drugs First?

Step therapy means your plan forces you to try cheaper drugs before they’ll pay for the one your doctor prescribed. For example, you might need to fail on two generic arthritis meds before they cover your biologic. This isn’t rare. Nearly 4 in 10 Marketplace plans use step therapy for specialty drugs. It can delay treatment. It can make your condition worse. Ask: “Does this plan require step therapy for my medication?” If yes, get the list of drugs you must try first. Then talk to your doctor. Can any of them work for you? If not, you might need to appeal or switch plans.

Do I Need Prior Authorization?

Prior authorization is a bureaucratic hurdle. Your doctor has to call or fax the insurer to prove your drug is medically necessary. If they don’t get approval before you fill the script, you pay full price. About 28% of Medicare Part D prescriptions require this. For drugs like Ozempic or Humira, it’s almost guaranteed. Ask: “Does my drug need prior authorization?” If yes, ask how long it takes to get approved. Can your pharmacy help? Do you need paperwork from your doctor? Don’t wait until the pharmacy counter to find out. Start the process early.

What’s My Deductible for Prescriptions?

Some plans make you pay the full cost of your meds until you hit a deductible. For Bronze plans, that deductible can be $6,000. That means if your monthly pill costs $300, you pay $300 every month until you’ve spent $6,000. That’s 20 months of full price. Gold plans often have $150 or less. If you take even one expensive drug, a low deductible matters more than a low premium. Ask: “Is there a separate prescription deductible?” And if yes, how much is it? Don’t confuse your medical deductible with your drug deductible. They’re often different.

What’s My Out-of-Pocket Maximum for Drugs?

This is the most you’ll pay in a year for covered prescriptions. Once you hit it, the plan pays 100%. But here’s the catch: not all plans cap drug costs the same. Some have separate out-of-pocket maximums for medical and drug costs. Others combine them. Medicare Part D will cap total out-of-pocket drug spending at $2,000 in 2025 - a huge change. But your private plan might not. Ask: “What’s my annual out-of-pocket maximum for prescription drugs?” And: “Does that include my deductible and copays?” If you’re on multiple high-cost meds, this number could save you thousands.

Which Pharmacies Are In-Network?

78% of Marketplace plans restrict you to a specific pharmacy network. Walk into an out-of-network pharmacy? You’ll pay 37% more. That’s not a small difference. If your local CVS isn’t in-network, but Walgreens is, you’re paying extra every month. Ask: “Which pharmacies are in-network?” Then check your regular pharmacy. Don’t assume. Even big chains aren’t always covered. If you use mail-order, ask if that’s an option - and if it’s cheaper. Some plans give you a 90-day supply at a lower copay if you use mail-order.

What Happens in the Coverage Gap (Donut Hole)?

If you’re on Medicare Part D, you’ll hit the coverage gap - the “donut hole” - once you and your plan have spent $5,030 on drugs in 2024. In the gap, you pay 25% of the cost. That’s better than it used to be, but it still hurts. If you take a $1,200 specialty drug, you’re paying $300 per month during the gap. Ask: “Does this plan have a coverage gap?” And: “What do I pay during it?” The good news: in 2025, the donut hole disappears entirely for Medicare Part D. But until then, know where you stand.

When Can I Switch Plans?

You can’t change your plan anytime. Marketplace plans lock you in until next Open Enrollment - November 1 to January 15. Medicare Part D plans let you switch during Annual Election Period - October 15 to December 7. Outside those windows, you’re stuck - unless you qualify for a Special Enrollment Period. Examples: moving, losing other coverage, or if your drug gets dropped. Ask: “What are the enrollment windows?” And: “What qualifies me for a Special Enrollment?” If your meds are too expensive or not covered, waiting six months isn’t an option. Know your escape routes.

What’s Changing in 2025?

Big changes are coming. Starting January 1, 2025, Medicare Part D will cap your total out-of-pocket drug costs at $2,000 per year. Insulin will cost no more than $35 per month. And the coverage gap disappears. These changes won’t affect private plans, but they’re a sign of what’s possible. If you’re on Medicare, use 2024 to compare plans now - because 2025 will be better. If you’re on a Marketplace plan, check if your insurer is adjusting formularies or copays for 2025. Some are already shifting to value-based designs - lower copays for essential meds like blood pressure or diabetes drugs. Ask: “Are there any changes coming next year that affect my drugs?”

What to Do Next

Don’t wait until you’re at the pharmacy counter. Right now, open your insurer’s website. Go to the formulary tool. Enter your top three medications. Check the tier, the copay, and if prior auth is needed. Do the same for your pharmacy. If you’re on Medicare, use the Medicare Plan Finder. Enter your drugs and zip code. Compare at least three plans. Spend 20 minutes. That’s all it takes. People who do this save an average of $1,147 a year. One woman in Texas switched from a Silver to a Gold plan after checking her insulin coverage. Her out-of-pocket dropped from $4,800 to $600. The premium went up $200. She saved $4,200. That’s not luck. That’s knowing what to ask.